Private Sector Protests New KEBS Levy, Warns of Rising Cost of Doing Business

Kenya’s leading business associations have called for the suspension of the new standards levy introduced by the Kenya Bureau of Standards (KEBS), warning that the measure will significantly raise the cost of doing business and undermine the competitiveness of local manufacturers.

The government gazetted the Standards (Standards Levy) Order, 2025 under Legal Notice No. 136 on August 8, 2025, requiring manufacturers to remit 0.2 percent of their monthly turnover, exclusive of VAT and discounts, subject to a capped amount.

While the levy rate remains unchanged, the new order significantly increases the cap on payments. Manufacturers will now pay up to Sh4 million annually for the first five years, rising to Sh6 million per year thereafter.

This marks a sharp increase from the previous cap of Sh400,000 annually under the 1990 order, representing a tenfold rise in the potential financial obligation for companies.

Business associations say the increase places an unprecedented burden on the productive sector and risks slowing investment and job creation.

“At the maximum rate, companies will effectively pay about Sh11,000 per day during the first five years, rising to roughly Sh16,000 per day thereafter,” the associations said in a joint statement.

They warned that the additional costs will ultimately be passed on to consumers, further increasing prices in an already challenging economic environment.

Industry groups also argue that the levy places Kenyan manufacturers at a disadvantage compared with imported goods, which are not subject to the same charge.

According to the associations, the levy is unique to Kenya and does not exist in other member states of the East African Community, raising concerns about regional competitiveness and the potential diversion of investment to neighbouring markets.

The private sector further questioned the classification of certain sectors under the levy. Growers represented by the Kenya Flower Council say flowers—being naturally grown commodities—should not be categorised as manufactured goods.

They argue that the sector is already subject to inspections, certifications and licensing requirements by several regulators, making the levy an additional financial burden that amounts to double taxation.
Mining and quarrying companies have also raised concerns, noting that the sectors already pay multiple statutory levies and regulatory charges.

Businesses further questioned the link between the levy and the services provided by KEBS, noting that companies already pay substantial fees for standardisation marks, inspections, testing and certification.

“Levies should ideally be tied to specific services rather than used as revenue mobilisation tools,” the associations said.

The matter is currently before the High Court, with the hearing scheduled for April 13, 2026.
While respecting the judicial process, the private sector is pushing for the immediate suspension of the order and a return to stakeholder consultations.

The associations are also calling for an independent review of the KEBS financing framework and the establishment of a joint public–private working group involving KEBS, the Ministry of Investments, Trade and Industry and business organisations.

They further propose exemptions for sectors not directly regulated by KEBS, including horticulture and firms operating under special investment schemes such as those managed by the Export Processing Zones Authority.

The joint statement was issued by several business membership organisations, including the Kenya Association of Manufacturers, Kenya Private Sector Alliance, Cereal Millers Association and the Shippers Council of East Africa, among others.

The groups say they have united to advocate for a fair and predictable regulatory environment that supports investment, job creation and sustainable economic growth in Kenya.